Snap's (SNAP) first-ever quarterly earnings as a public company are in and the results weren't what Wall Street was hoping for. The social media upstart posted revenue that fell short of analysts' estimates and slower user growth than was expected, causing shares to plummet more than 23% to $17.60 after-hours on Wednesday and shaving off nearly a quarter of the stock's value. The stock price is just barely above Snap's initial offering price of $17.
For the fiscal first quarter, Snap reported a loss of $2.21 billion, or $2.31 per share, up from the $104.6 million it saw during the same period one year ago -- a cost that the company attributed to $2 billion worth of compensation-related expenses tied to its initial public offering in March. Of those expenses, CEO Evan Spiegel received a $750 million bonus for taking the company public.
Among other key figures, revenue jumped 286% year-over-year to about $150 million, but that still fell short of Wall Street's expected $158 million. Revenue also declined from the fourth quarter, when Snap's total sales were roughly $166 million.
Daily active users, a closely watched number in the report, grew 5% quarter-over-quarter to 166 million, compared to analysts' projected 168 million DAUs. Despite being lower-than-expected, Snap's user growth improved compared to the fourth quarter, when its DAUs grew 4% quarter-over-quarter. Still, Snap's user numbers pale in comparison to Facebook (FB) , arguably Snap's biggest rival, who just said it reached nearly 2 billion monthly users.
Snap's fierce competition with Facebook was also a widely discussed topic on the company's earnings call late Wednesday. When asked outright whether Facebook scares him, Spiegel said Snap is attacking issues like that through product innovation and creativity.
"I think the bottom line is like...people are going to copy your products if you make great stuff," Spiegel told investors on the call. "I think we see this happening a lot in technology. When Alphabet's (GOOGL) Google came along everyone really felt like they needed a search strategy...And I think at the end of the day, just because Yahoo! (YHOO) has a search bar doesn't mean that they are Google."